Bisichi Regulatory News (BISI)

30 Apr 2009 07:00

BISICHI MINING PLC Results for the year ended 31 December 2008 RECORD PERFORMANCE AT SOUTH AFRICAN COAL MINING OPERATIONS

* Record profit before tax in excess of £6 million (realised) (2007: £2.3

million) reflects impact of open cast mining at Black Wattle Colliery

* £5.1 million of profit before tax (realised) made in second half of 2008

* Monthly production at Black Wattle rises to 130,000 metric tonnes per month

* Mine CAPEX, due for completion in Q2 2009, will increase plant capacity to

170,000 metric tonnes per month * Investment property portfolio revalued in line with the market but recession has not had any effect on rental income or lettings * Dividend increased by 16.7% to 3.5p per share

Commenting on the results, Michael Heller, chairman of Bisichi Mining PLC said:

"2008 has been another record year for Bisichi. Despite the challenges of the global recession we are well positioned for the coming year."

END

For further information, please call:

Andrew Heller,

Robert Corry,

Tom Kearney, Bisichi Mining PLC 020 7415 5030

Christopher Joll BLJ Financial 07721 330730

CHAIRMAN'S STATEMENT

I am very pleased to inform shareholders that Bisichi made a record profitbefore tax in 2008 in excess of £6.0 million (Realised) (2007: £2.3 million).As £5.1 million of this profit was made in the second half of 2008, at a timewhen international commodity prices were tumbling, the year's success can beattributed to the advent of open cast mining at Black Wattle combined withstrong performance from the existing underground sections. In contrast to manymining companies around the world, the financial position of Bisichi has neverbeen stronger.The commencement of open cast mining at Black Wattle Colliery in April 2008fundamentally changed the profitability profile of the mine. In addition toimproving yields and product quality, open cast mining also allows us to minemuch more flexibly, adding or reducing production promptly when necessary. As aresult of the open cast mining, we have been able to increase monthlyproduction to a regular 130,000 metric tonnes per month. We are presentlyfinalising applications to the Department of Mineral and Energy (DME) for theopening up additional areas to mine open cast.In 2008, we commenced a capital investment programme at Black Wattle which,when completed in the second quarter of 2009, will expand the plant's capacityfrom 130,000 to 170,000 metric tonnes per month. The investment programme isalready producing results having already improved yields and increasedproductivity at the plant.In April 2008 - with the full and final settlement of our dispute with ourprevious Black Economic Empowerment (BEE) partner - we embarked on a search toidentify a new BEE partner for a 37.5% equity stake in Black Wattle. I ampleased to report that, in November 2008, we signed an agreement for the saleof this stake to a well recognised, publicly listed BEE company with a strongtrack record in financial services, property and mining. Further details ofthis transaction will be released in due course once the transaction hasreceived the approval of the Department of Minerals and Energy.Bisichi's UK retail property portfolio, managed by London & AssociatedProperties PLC, continues to contribute substantial cash to the company and isvirtually fully let. Although there has been a significant downturn in the UKproperty market and, more specifically, in the valuation of Bisichi's propertyportfolio, we are intensively managing the properties to ensure that rentalincome remains strong. To date, we have not seen any effect on rental income oron the lettings within the portfolio: in 2008, rental income totalled £1.032million (2007: £1.019 million).

To underline our confidence in the future of Bisichi, your directors are recommending a dividend of 3.5p, compared to a 3.0p per share in the previous year, an increase of 16.7%. This will be paid on Monday 10 August to shareholders on the register at the close of business on 4 July 2009.

2008 has been a record year for Bisichi. Although we anticipate 2009 will be adifficult year in the international coal market, with the open cast operationsrunning smoothly at Black Wattle and your management taking a proactiveapproach to managing in the downturn, we are well positioned for the coming

year.Michael Heller, ChairmanMINING REVIEW

As noted in the Chairman's statement, 2008 was a record year for Bisichi in South Africa. Our direct mining asset, Black Wattle, enjoyed its most profitable year ever. It is important to stress that most of this profit was made in the second half of 2008. This was as a result of open cast mining coming on line in April 2008, when we were able to improve production and quality at Black Wattle Colliery even as international commodity markets started to collapse. We will continue to see the value of the opencast operation contributing strongly to Black Wattle's profitability in 2009.

Production

The effect of open cast on yield, quality, and profitability has been immediateand continuous. Total run of mine production in 2008 was 1.31 million metrictonnes, but the trend for the second half (when the open cast was in fullcommercial production) was closer to an annual production rate of 1.5 millionmetric tonnes. Given the reliability and flexibility of the open castoperations, we have been able to increase production to a regular 130,000metric tonnes per month.During 2008, the number of underground shifts was reduced from three to two. Weexpect, after nearly five years in operation, the continuous miner section willcome to the end of its operational life in 2009. Any reduction in tonnage fromthe closure of the continuous miner section will be made up from the open castsection and the potential buy in of coal.An intensive capital investment programme was carried out at the washing plantin 2008. In addition to increasing productivity and efficiency at the plant,the investment programme will also expand the capacity of the washing plant to170,000 metric tonnes per month. This expansion is scheduled for completion inthe second quarter of 2009. The enhanced plant will give us the opportunity toincrease production from our own operations or to purchase coal from nearbyoperations which do not have their own coal washing facilities.

Markets

2008 witnessed one of the most volatile periods in the international coalmarket in decades. At the beginning of 2008, the average weekly price of Freeon Board (FOB) Coal from Richards Bay Coal Terminal (API4) stood at nearlyUS$100.00 per metric tonne. By June 2008, this had increased to US$140.00 permetric tonne, peaking at over US$180.00 per metric tonne by August. By the endof the year, the API4 price had fallen to US$75.00 per metric tonne. API4currently trades at about US$ 61.00 per metric tonne.

In late 2007, we fixed our export coal price until the end of 2009 for the majority of our export coal with one of the the world's largest commodities traders. While the bulk of our export volumes are covered by this fixed price contract, there will be some incremental volumes sold on a spot basis which will reflect the new international prices.

Domestic prices benefited from the sharp rise in international coal prices andwe achieved significant price increases in 2008. These prices are now beginningto reflect the downturn and we anticipate having to reduce our prices for ourdomestic steam coal product. As a result of the collapse in global steelprices, the ferrochrome industry has effectively ceased production in SouthAfrica. As a consequence, we do not anticipate supplying large volumes of lowphosphorous coal to the ferrochrome industry in 2009.

Health, Safety & Environment (HSE)

Black Wattle is committed to creating a safe and healthy working environmentfor its employees, and the health and safety of our employees is of the utmostimportance. In addition to the requisite personnel appointments and assignmentof direct health and safety responsibilities on the mine, a system of HazardIdentification and Risk Assessments has been designed, implemented, andmaintained at Black Wattle.Health and Safety training is conducted on an ongoing basis. Supervisors andabout 60 percent of employees up to date have received training in hazardidentification and risk assessment in their work areas. A medical surveillancesystem is in place which provides management with information used indetermining measures to eliminate, control and minimalise employee health risksand hazards and all Occupational Health hazards are monitored on an ongoingbasis.

A Health Safety and Environment Manager was recently appointed. The key performance targets of the HSE Manager are:

* To eliminate, control and minimise the risk to all employees at Black

Wattle Colliery.

* Effective management and control of contractor activities at Black Wattle

Colliery from a HSE perspective. * Develop, implement and monitor the Risk and Change Management process. * Ensure compliance of HSE systems to legal and other requirements. * Develop, implement and maintain together with management team a HSE

strategy to ensure continual improvement of the company's HSE performance.

* Develop, implement and maintain an investigation system to determine the

immediate and underlying causes of incidents.

Various systems to enhance the current HSE strategy have been introduced as follows:

* In order to improve hazard identification before the commencing of tasks,

mini risk assessment booklets were rolled out to all mine employees and long term contractors on the mine. * In order to improve the current reporting practice of incidents on the mine, Initial reporting of incidents booklets were handed out to all employees and contractors.

* In order to capture and record investigation findings from incidents, an

incident recording sheet was introduced to line management and contractors

.

* Hazard Identification and Risk Assessment training was presented to line

management, Head of Department's and contractor representatives.

* A HSE `contractor pack' was introduced to all contractors working on Black

Wattle. * A weekly labour return form was introduced to all contractors. * A Plan, Do, Review system for all Heads of Department was introduced to encourage managers to take ownership of HSE matters.

* In order to effectively control jobs over weekends that require additional

risk assessments to safely perform tasks, a weekend work register was

introduced on the mine.

Environment Management Programme

Under the terms of the mine's Environmental Management Programme approved bythe DME, Black Wattle undertakes a host of environmental protection activitiesto ensure that the approved Environmental Management Plan is fully implemented.In addition to these regular activities, Black Wattle regularly carries outenvironmental monitoring activities on and around the mine, includingevaluation of ground water quality, air quality, noise and lighting levels,ground vibrations, air blast monitoring, and assessment of visual impacts.

Community Support and Social Development

Black Wattle is an active participant in the Steve Tshwete Municipal Area, the locality where many of the mine's employees reside. Black Wattle regularly provides municipal services to our surrounding community, including waste removal, road repair, transport, provision of winter fuel supplements, and emergency water supply assistance.

Black Wattle has continuously provided ongoing support to the local EvergreenPrimary School, including the construction and maintenance of a perimeterfence, the electrification of main school buildings, the construction ofoffices and repair of school facilities, and support for the employment costsof additional school staff.

Procurement

In compliance with the Mining Charter and the Mineral and Petroleum ResourceDevelopment Act, Black Wattle has implemented a BEE-focussed procurement policywhich strongly encourages our suppliers to establish and maintain BEEcredentials. At present, BEE companies provide approximately 66 percent ofBlack Wattle's equipment and services. We closely monitor our monthlyexpenditure and welcome potential BEE suppliers to compete for equipment andservice contracts at Black Wattle. Black Wattle also sells much of its coalproducts to empowered companies as evidenced by our long term sales agreementwith a BEE company for the purchase of our discard product which is then soldto the national power utility Eskom.

Employment Equity

Black Wattle is committed to achieving the goals of the Employment Equity Act.Presently, over 13 percent of Black Wattle's workforce is female, whichincludes women working as artisans and mining equipment operators. BlackWattle's Workplace Skills Plan and Annual Training report has been approved bythe Mining Qualifications Authority.

Skills Training

Black Wattle has constructed a computer- equipped training centre which supports the mine's Adult Basic Education and Training (ABET) programme, provides HIV/AIDS education and carries out other continuing education programmes for the mining workforce. A Training Manager has been appointed to lead training activities on the mine.

People

In April 2008, Luis Pinel was appointed General Manager of Black Wattle. Luishas made a substantial contribution to Black Wattle's performance during theyear. Luis has made a number of key senior appointments on the mine, includingthat of Nic Bessenger as HSE Manager. Nic Bessenger's key role on the mine isto manage all HSE functions as well as safety related training activities.

Prospects

I cannot emphasise enough the value of having a profitable and fullyoperational mine in the current environment. Many developing mines have beendelayed or stopped altogether because of lack of finance and the collapse ininternational commodity markets. While the prices for coal have fallen weprudently fixed the price for much of our export coal in 2007 until towards theend of 2009. Furthermore, open cast mining has fundamentally changed the coststructure and the level of productivity at Black Wattle. Going forward, we arepresently submitting additional applications for open cast permission whichwill extend the life and improve productivity at the mine even further. I amconfident that 2009 should be successful for our South African operations.

Andrew Heller, Managing Director

BUSINESS REVIEW

Review of the group's development and performance

The Chairman's Statement and the Mining Review on the preceding pages 2 to 11give a comprehensive review and assessment of the group's activities during thepast year and prospects for the forthcoming year.

Risk

Coal price risk: The group's mining operations earnings are largely dependenton movements in the coal price. It does have the flexibility in terms ofmarkets where it can sell its coal domestically (to local industrial consumersand the power industry) or to export to international markets.

Coal washing: The group's mining operation's earnings are highly sensitive to coal washing, therefore a stoppage or disruption to the process could significantly impact earnings. However, there is scope to raise earnings substantially if the yield from the washing process is improved even marginally.

Mining risk: Part of the group's South African operation is an undergroundmine, attached to which there are inherent health and safety risks. Any suchsafety incidents disrupt operations, and can slow or even stop production. Thegroup has a comprehensive Health and Safety programme in place to mitigatethis. There is scope to increase production in the opencast section tocompensate for disruption in production from the underground mine.

As with many mining operations, the reserve that is mined has the risk of not having the qualities expected from geological analysis.

Currency risk: The group's South African operations are sensitive to currency movements, especially those between the South African Rand, US Dollar and Sterling .

New reserves and mining permissions: The acquisition of additional reserves,permissions to mine opencast on existing reserves and new mining opportunitiesin South Africa generally are contingent on a number of factors outside of thegroup's control, e.g. approval by the Department of Minerals and Energy.

Regulatory risk: The group's South African operations are subject to the government Mining Charter and scorecard which primarily seeks to:

* Promote equitable access to South Africa's mineral resources for all people

in South Africa;

* Expand opportunities for historically disadvantaged South Africans

(HDSA's), including women, to enter the mining and minerals industry and

benefit from the extraction and processing of the country's resources; * Utilise the existing skills base for the empowerment of HDSA's; * Expand the skills base of HDSA's in order to serve the community; * Promote employment and the social and economic welfare of mining communities and areas supplying mining labour; and

* Promote beneficiation of South Africa's mineral commodities beyond mining

and processing, including the production of consumer goods.

The group continues to make good progress towards meeting the Charter requirements. However any regulatory changes to these, or failure to meet existing targets, could adversely affect the mine's ability to retain its mining rights in South Africa.

Transport risk: At present the government owned Transnet Freight Rail (TFR) isthe sole rail freight provider for coal in South Africa. The group's SouthAfrican operations are therefore reliant on TFR for delivery of its exportquality coal directly or indirectly via the Southern African ports to its endcustomers.Power supply risk: The current utility provider for power supply in SouthAfrica is the government run Eskom. Eskom has recently undergone capacityproblems resulting in power cuts and lack of provision of power supply to newprojects. The group's mining operations have to date not been affected by powercuts.Flooding risk: The group's mining operations are susceptible to seasonalflooding which could disrupt production. Management monitors water levels on anongoing basis and various projects have been completed or are due forcompletion in the coming months, including the construction of additional dams,to mitigate this risk.Environmental risk: The group's South African mining operations are required toadhere to local environmental regulations. Details of the groups EnvironmentManagement Programme is disclosed in the mining review on page 6.Health & Safety risk: The group's South African mining operations are requiredto adhere to local Health and Safety regulations. Details of the groups Healthand Safety Programme is disclosed in the mining review on page 6.Labour risk: The group's underground mining operations and coal washing plantfacility are labour intensive and unionised. Any labour disputes, strikes orwage negotiations may disrupt production and impact earnings.We seek to balance the high risk of our mining operations with a dependablecash flow from our UK property investment operations. Fluctuations in propertyvalues, which are reflected in the Income Statement and Balance Sheet, aredependent on an annual valuation of commercial properties. During recent yearshealthy surpluses have been shown in the group's annual year end propertyvaluations, but a fall in UK commercial property has had a marked effect inprofitability and the net asset value of the group. However, due to the longterm nature of the leases, the effect on cash flows from property investmentactivities will remain stable as long as tenants remain in operation.

Future development

The group seeks to expand its operations in South Africa through the acquisition of additional coal reserves.

Environment and employment

The group's UK activities are principally property investment whereby we provide premises which are rented to retail businesses. We seek to provide those tenants with good quality premises from which they can operate in an efficient and environmentally sound manner.

Our South African mining operations are regulated by and are operated in compliance with all relevant prevailing national and local legislation. Employment terms and conditions provided to mining staff meet or exceed the national average.

Performance indicators

The Key Performance Indicator for our South African mining activities is Profit before Tax (PBT) and Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA).

The Key Performance Indicator for our UK property investment operations is the Net Property Valuation as shown on page 42 note 11.

DIRECTORS' REPORT

The directors submit their report together with the audited financial statements for the year ended 31 December 2008.

Activities and review of business

The company continues its mining activities. Income for the year was derivedfrom sales of coal from its South African operations. The company also has aproperty investment portfolio for which it receives rental income.The results for the year and state of affairs of the group and the company at31 December 2008 are shown on pages 29 to 50 and in the Mining Review andBusiness Review on pages 6 to 15. Future developments and prospects are alsocovered in the Mining Review. Over 99 per cent of staff are employed in theSouth African coal mining industry - employment matters and health and safetyare dealt with in the Mining and Business reviews.

Corporate responsibility

Environment:The environmental issues of the group's South African coal miningoperations are covered in the Mining Report and Business Review on pages 6 to15.The group's UK activities are principally property investment whereby premisesare provided for rent to retail businesses. The group seeks to provide thosetenants with good quality premises from which they can operate in an efficientand environmentally friendly manner. Wherever possible, improvements, repairsand replacements are made in an environmentally efficient manner and wastere-cycling arrangements are in place at all the company's locations.Employment: The group's policy is to attract staff and motivate employees byoffering competitive terms of employment. The group provides equalopportunities to all employees and prospective employees including those whoare disabled. The Mining Review gives details of the group's activities andpolicies concerning the employment, training, health and safety and communitysupport and social development concerning the group's employees in SouthAfrica.

Dividend

The directors recommend the payment of a dividend of 3.5p per share (2007: 3.00p) on the ordinary share capital for the year under review. The dividend will be payable on Monday 10 August 2009 to shareholders registered at the close of business on 4 July 2009. The ex-dividend date will be 2 July 2009.

Investment properties

The investment property portfolio is stated at its open market value of £ 11,773,000, at 31 December 2008 (2007:£14,725,000) as valued by professional external valuers.

Financial instrumentsNote 22 to the financial statements sets out the risks in respect of financialinstruments. The Board reviews and agrees overall treasury policies, delegatingappropriate authority to the managing director. Financial instruments are usedto manage the financial risks facing the group - speculative transactions arenot permitted. Treasury operations are reported at each Board meeting and aresubject to weekly internal reporting. Derivatives have been put in place, asrequired by the group's bankers to reduce interest rate risk.

Directors

The directors of the company for the whole year were M A Heller, A R Heller, C A Joll, T M Kearney and J A Sibbald. R J Grobler, who is a South African citizen, was appointed to the board by the directors on 22 April 2008. A proposal for his election will be made at the AGM and is recommended by the board. The directors retiring by rotation are A R Heller, C A Joll and J A Sibbald who offer themselves for re-election. The board recommends their re-appointment.

Robert Grobler was appointed as General Mine Manager by Black Wattle Colliery(Proprietary) Limited on 1 May 2000. He was appointed to the board of BisichiMining PLC as Director of Mining on 22 April 2008. He has over 40 yearsexperience in the South African coal mining industry. He is a professionalengineer and member of the South African Coal Managers Association.

Andrew Heller has been an executive director since 1998. He is a Chartered Accountant and has been employed by the group since 1994 under a contract of employment determinable at three months notice.

Christopher Joll has been a director since 2001 and has a contract of servicedeterminable at three months notice. He holds a number of non-executivedirectorships of un-quoted companies. He is chairman of BLJ Financial Limited,a financial public relations company, which provides services to the group.John Sibbald has been a non-executive director since 1988. He is a retiredchartered accountant. For most of his career he was employed in stockbroking inthe City of London where he specialised in mining and international investment.He has a contract of service determinable at three months notice.

No director had any material interest in any contract or arrangement with the company during the year other than as shown in this report.

Directors' shareholdings

The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, were as follows:

Beneficial Non-beneficial 31.12.2008 1.1.2008 31.12.2008 1.1.2008 M A Heller 146,666 146,666 181,334 181,334 A R Heller 772,000 772,000 - - C A Joll 5,000 5,000 - - T M Kearney 57,500 35,000 - - J A Sibbald - - - -

R J Grobler (from appointment - - -

-on 22 April 2008)

There have been no changes in the above shareholdings since 31 December 2008.

Details of the options to subscribe for new ordinary shares of the company granted to the directors are contained under "Share option schemes" in the remuneration report on page 24.

Substantial interests

The following have advised that they have an interest in 3 per cent or more of the issued share capital of the company as at 17 April 2009:

London & Associated Properties PLC - 4,355,752 shares representing 41.68 per cent of the issued capital.

M A Heller is a director and shareholder of London & Associated Properties PLC.

M A Heller - 328,000 shares representing 3.14 per cent of the issued capital.

A R Heller - 772,000 share representing 7.39 per cent of the issued capital.

Neil Kirton - 382,000 shares representing 3.65 per cent of the issued capital.

Disclosure of information to auditors

The directors in office at 31 December 2008 have confirmed that they are awarethat there is no relevant audit information of which the auditors are unaware.Each of the directors has confirmed that they have taken all the steps theyought to have taken as directors to make themselves aware of any relevant auditinformation and to establish that it has been communicated to the auditor.

Corporate governance

The company has adopted the Guidance for Smaller Quoted Companies published bythe Quoted Companies Alliance (QCA). The QCA provides guidance to companiesoutside the FTSE 350 index, referred to generally as SQCs. The QCA's guidancecovers the implementation of the Combined Code on Corporate Governance for SQCsand the paragraphs below set out how the company has applied this guidanceduring the year. The company has complied with the QCA's guidance throughoutthe year.

Principals of corporate governance

The group's Board appreciates the value of good corporate governance not onlyin the areas of accountability and risk management, but also as a positivecontribution to business prosperity. The Board endeavours to apply corporategovernance principals in a sensible and pragmatic fashion having regard to theindividual circumstances of the group's business. The key objective is toenhance and promote shareholder value.

Board structure

During the year the Board comprised the executive chairman, the managingdirector, two other executive directors, and two non-executive directors. Theirdetails appear on page 24. The Board is responsible to shareholders for theproper management of the group. A statement of directors' responsibilities inrespect of the accounts is set out on page 29.The non-executive directors have a particular responsibility to ensure that thestrategies proposed by the executive directors are fully considered. To enablethe Board to discharge its duties, all directors have full and timely access toall relevant information and there is a procedure for all directors, infurtherance of their duties, to take independent professional advice, ifnecessary, at the expense of the group. The Board has a formal schedule ofmatters reserved to it and meets bi-monthly. It is responsible for overallgroup strategy, approval of major capital expenditure projects andconsideration of significant financing matters.

The following committees, which have written terms of reference, deal with specific aspects of the group's affairs:

• The nomination committee is chaired by C A Joll and comprises the non-executive directors and the executive chairman. The committee is responsible for proposing candidates for appointment to the Board, having regard to the balance and structure of the Board. In appropriate cases recruitment consultants are used to assist the process. All Directors are subject to re-election at least every three years.

• The remuneration committee is responsible for making recommendations to theBoard on the company's framework of executive remuneration and its cost. Thecommittee determines the contract terms, remuneration and other benefits foreach of the executive directors, including performance related bonus schemes,pension rights and compensation payments. The Board itself determines theremuneration of the non-executive directors. The committee comprises thenon-executive directors. It is chaired by C A Joll. The executive chairman isnormally invited to attend meetings. The report on directors' remuneration isset out on pages 26 and 27.• The audit committee comprises the two non-executive directors and is chairedby C A Joll. Its prime tasks are to review the scope of external audit, toreceive regular reports from PKF and to review the half-yearly and annualaccounts before they are presented to the Board, focusing in particular onaccounting policies and areas of management judgment and estimation. Thecommittee is responsible for monitoring the controls which are in force toensure the integrity of the information reported to the shareholders Thecommittee acts as a forum for discussion of internal control issues andcontributes to the Board's review of the effectiveness of the group's internalcontrol and risk management systems and processes. The committee also considersthe need for an internal audit function. It advises the board on theappointment of external auditors and on their remuneration for both audit andnon-audit work, and discusses the nature and scope of the audit with theexternal auditors. The committee, which meets formally at least once a year,provides a forum for reporting by the group's external auditors. Meetings arealso attended, by invitation, by the managing director and director of finance.

The audit committee also undertakes a formal assessment of the auditors' independence each year which includes:

• a review of non-audit services provided to the group and related fees;

• discussion with the auditors of a written report detailing all relationshipswith the company and any other parties that could affect independence or theperception of independence;• a review of the auditors' own procedures for ensuring the independence of theaudit firm and partners and staff involved in the audit, including the regularrotation of the audit partner; and

• obtaining written confirmation from the auditors that, in their professional judgement, they are independent.

The audit committee report is set out on page 28.

An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in note 5 to the financial statements.

Performance evaluation - board, board committees and directors

The performance of the board as a whole and of its committees and thenon-executive directors is assessed by the chairman and the managing directorand is discussed with the senior independent director. Their recommendationsare discussed at the nomination committee prior to proposals for re-electionbeing recommended to the board. The performance of executive directors isdiscussed and assessed by the remuneration committee. The senior independentdirector meets regularly with the chairman and both the executive andnon-executive directors individually outside of formal meetings. The directorswill take outside advice in reviewing performance but have not found thisnecessary to date.

Board and board committee meetings

The number of meetings during 2008 and attendance at regular board meetings and board committees was as follows:

Meetings held Meetings attended M A Heller Board 5 5 Nomination committee 0 0 A R Heller Board 5 5 Audit committee 2 2 R J Grobler Board (appointed 22 April 3 1 2008) C A Joll Board 5 5 Audit committee 2 2 Nomination committee 0 0 Remuneration committee 1 1 T M Kearney Board 5 5 Audit committee 2 1 J A Sibbald Board 5 5 Audit committee 2 2 Nomination committee 0 0 Remuneration committee 1 1The audit committee had two meetings in 2008 with the external auditorspresent, prior to release of the 2007 annual results. Members of the committeediscussed the 30 June 2008 half year results prior to their approval by thefull Board. The business of the nomination committee was dealt with at Boardmeetings and the committee held no individual meetings.

Independent Directors

The senior independent non-executive director is Christopher Joll. The otherindependent non-executive director is John Sibbald. Christopher Joll is aminority shareholder and director of BLJ Financial Limited, a company whichprovides financial public relations services to the company on an ad hoc basisin relation to specific transactions.John Sibbald has been a director for over twenty years. For these reasons thecriteria for independence set out in the Combined Code are not entirely met.However the Board considers that Mr Joll and Mr Sibbald are both independentdirectors and that their independence is not impaired by their failure to meetthese criteria.

The independent directors regularly meet prior to Board meetings to discuss corporate governance issues.

Internal control

The directors are responsible for the group's system of internal control andreview of its effectiveness at least annually. The Board has designed thegroup's system of internal control in order to provide the directors withreasonable assurance that its assets are safeguarded, that transactions areauthorised and properly recorded and that material errors and irregularitiesare either prevented or would be detected within a timely period. However, nosystem of internal control can eliminate the risk of failure to achievebusiness objectives or provide absolute assurance against material misstatementor loss.

The key elements of the control system in operation are:

• The Board meets regularly with a formal schedule of matters reserved to itfor decision and has put in place an organisational structure with clear linesof responsibility defined and with appropriate delegation of authority;

• There are established procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the group's financial performance against approved budgets and forecasts;

• UK property and financial operations are closely monitored by members of theBoard and senior managers to enable them to assess risk and address theadequacy of measures in place for its monitoring and control. The South Africanoperations are closely supervised by the UK based executives through daily,weekly and monthly reports from the directors and senior officers in SouthAfrica. This is supplemented by frequent visits by the UK executives to theSouth African based operations which include checking the integrity ofinformation supplied to the UK. The directors are guided by "Internal ControlGuidance for Directors on the Combined Code" as issued by the Institute ofChartered Accountants in England and Wales.

During the period, the audit committee has reviewed the effectiveness of internal control as described above. The Board receives periodic reports from all its committees.

There are no significant issues disclosed in the report and financialstatements for the year ended 31 December 2008 and up to the date of approvalof the report and financial statements that have required the Board to dealwith any related material internal control issues. The directors confirm thatthe Board has reviewed the effectiveness of the system of internal control asdescribed during the period.

Communication with shareholders

Communication with shareholders is given a high degree of priority. Extensiveinformation about the group and its activities is given in the Annual Reportand Accounts, and the Half-year Report, which are sent to shareholders. Furtherinformation is available on the company's website, www.bisichi.co.uk. There isa regular dialogue with institutional investors. Enquiries from individuals onmatters relating to their shareholdings and the business of the group are dealtwith informatively and promptly.

Payment of suppliers

The company agrees terms of contracts when orders are placed. It is company policy that payments to suppliers are made in accordance with those terms, provided that suppliers also comply with all relevant terms and conditions. Trade creditors outstanding at the year end represented 2.9 days trade purchases (2007 - 15.7 days).

Takeover Directive

The company has one class of share capital, ordinary shares. Each ordinaryshare carries one vote. All the ordinary shares rank pari passu. There are nosecurities issued in the company which carry special rights with regard tocontrol of the company. The identity of all significant direct or indirectholders of securities in the company and the size and nature of their holdingsis shown in "Substantial interests".A relationship agreement dated 15 September 2005 (the "Relationship Agreement")was entered into between the company and London & Associated properties PLC("LAP") in regard to the arrangements between them while LAP is a controllingshareholder of the company. The Relationship Agreement includes a provisionunder which LAP has agreed to exercise the voting rights attached to theordinary shares in the company owned by LAP to ensure the independence of theBoard of directors of the company.Other than the restrictions contained in the Relationship Agreement, there areno restrictions on voting rights or on the transfer of ordinary shares in thecompany. The rules governing the appointment and replacement of directors,alteration of the articles of association of the company and the powers of thecompany's directors accord with usual English company law provisions. Eachdirector is re-elected every three years or less. The company has not requestedauthority from its shareholders to buy back its own ordinary shares.The company is not party to any significant agreements that take effect, alteror terminate upon a change of control of the company following a takeover bid.The company is not aware of any agreements between holders of its ordinaryshares that may result in restrictions on the transfer of its ordinary sharesor on voting rights.

There are no agreements between the company and its directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid.

Annual General MeetingThe annual general meeting will be held at the Company's offices at 30-35 PallMall, London SW1Y 5LP on 11 June 2009 at 11.00 a.m. Items 1 to 9 will beproposed as ordinary resolutions. More than 50 per cent of shareholders' votesmust be in favour for these resolutions to be passed. Item 10 will be proposedas a special resolution. At least 75 per cent of shareholders' votes must be infavour for this resolution to be passed. The directors consider that all of theresolutions to be put to the meeting are in the best interests of the Companyand its shareholders as a whole. The board recommends that shareholders vote infavour of all of the resolutions.A special resolution will be proposed at the Annual General Meeting in respectof this disapplicationof pre-emption rights. :

Disapplication of pre-emption rights

Shares allotted for cash must normally first be offered to shareholders inproportion to their existing shareholdings. The directors will, at theforthcoming Annual General Meeting of the company (Resolution 10), seek powerto allot shares as if the pre-emption rights contained in Section 89(1) of theCompanies Act 1985 did not apply up to a maximum of 10% of the company's issuedshare capital. The authority will expire at the earlier of the conclusion ofthe company's next annual general meeting and 15 months from the passing ofResolution 10.

Donations

No political or charitable donations were made during the year (2007:Nil).

Going concern

The directors confirm that they have a reasonable expectation that the grouphas adequate resources to continue in operational existence for the foreseeablefuture. For this reason, the going concern basis has been adopted in thepreparation of the financial statements.

Other matters

PKF (UK) LLP has expressed its willingness to continue in office as auditors. Aproposal will be made at the annual general meeting for its re-appointment, andfor its remuneration to be determined by the directors.By order of the boardM C Stevens,Secretary30-35 Pall MallLondon SW1Y 5LP17 April 2009OUR MANAGEMENT TEAMMichael HellerChairmanBisichi Mining PLCAndrew HellerManaging DirectorBisichi Mining PLC,

Managing Director, Black Wattle Colliery

Robert GroblerDirector of MiningBisichi Mining PLC,

Director Black Wattle Colliery

Robert CorryChairmanBlack Wattle CollieryThomas KearneyCommercial DirectorBisichi Mining PLC,

Director Black Wattle Colliery

Christopher Joll

Senior Independent Director

Chairman, Audit and Remuneration Committees

David NkosiDirectorBlack Wattle CollieryLuis PinelGeneral ManagerBlack Wattle CollieryDIRECTORS & ADVISORS*Michael A HellerMA, FCA (Chairman)Andrew R HellerMA, ACA(Managing Director)Robert GroblerPr Cert Eng(Director of mining)Thomas M KearneyMA (Commercial Director)O+Christopher A JollMA (Non-executive)Christopher Joll was appointed a Director on 1 February 2001. He holds a numberof non-executive directorships of un-quoted companies. He is chairman of BLJFinancial Limited, a financial public relations consultancy.

OJohn A Sibbald

BL (Non-executive)

John Sibbald has been a Director since 1988. After qualifying as a CharteredAccountant he spent over 20 years in stockbroking, specialising in mining andinternational investment.

*Member of the nomination committee

+ Senior independent director

O Member of the audit, nomination and remuneration committees.

Secretary & Registered office

Michael C Stevens FCA30-35 Pall MallLondon SW1Y 5LPBlack Wattle CollieryDirectorsRobert Corry (Chairman)Andrew Heller(Managing Director)Robert GroblerTom KearneyDavid NkosiDirector of PropertyMike J Dignan FRICSAuditorsPKF (UK) LLPPrincipal bankersUnited KingdomBarclays Bank PLC

National Westminster Bank PLC

South AfricaABSA Bank (SA)First National Bank (SA)Standard Bank (SA)Corporate solicitorsUnited KingdomOlswang LLP, LondonSouth AfricaLeppan Beech, Johannesburg

Routledge Modise, Johannesburg

Tugendhaft Wapnick Banchetti and Partners, Johannesburg

Stockbrokers

Numis Securities

Registrars and transfer office

Capita Registrars, Northern House, Woodsome Park, Fenay Bridge, Huddersfield, West Yorkshire HD8 0LA

Telephone 0871 664 0300

(Calls cost 10p per minute + network extras) or

+44 208 639 3399 for overseas callers

Website: www.capitaregistrars.com

Email: ssd@capitaregistrars.com

Company registration No. 112155

(Incorporated in England and Wales)

Websitewww.bisichi.co.ukE-mailadmin@bisichi.co.uk

FIVE YEAR FINANCIAL SUMMARY

2008 2007 2006 2005 2004 £'000 £'000 £'000 £'000 £'000

Consolidated profit and loss

account Revenue 25,979 16,693 13,239 13,485 11,548 Operating (loss)/profit 2,616 (191) 2,362 4,664 4,385 (Loss)/Profit before tax 2,117 (459) 2,172 4,206 4,011

Realised profit/(loss) before tax 6,031 2,302 273 1114 2051

Unrealised (loss)/profit before tax (3,914) (2,761) 1,899 3092 1960 Consolidated balance sheet Investment properties 11,773 14,725 17,270 15,625 14,990 Fixed asset investments 3,406 2,991 3,028 2,943 1,860 15,179 17,716 20,298 18,568 16,850 Current asset investments 627 770 700 629 403 15,806 18,486 20,998 19,197 17,253 Other assets less liabilities (160) (3,127) (5,668) (4,578) (4,254) Consolidated shareholders funds per 15,646 15,359 15,330 14,619 12,999balance sheet Adjustment of current asset - - - - 123investments to market value

Consolidated shareholders funds* 15,646 15,359 15,330 14,619 13,122

Net assets per ordinary share* 149.7p 147.0p 146.7p 139.9p 125.6p Dividend per share 3.50p 3.0p 2.50p 2.25p 2.00p

* Based on net assets including the investment portfolio at market value.

FINANCIAL CALENDAR11 June 2009 Annual General Meeting 10 August 2009 Payment of final dividend for 2008 (if approved) Late August 2009 Announcement of interim results to 30 June 2009 Late April 2010 Announcement of results for the year ending 31 December 2009 REMUNERATION REPORTThe remuneration committee is pleased to present its report for the year ended31 December 2008. The remuneration committee is a formally constitutedcommittee and is comprised exclusively of non-executive directors. The membersof the committee are Christopher Joll (chairman) and John Sibbald.

Remuneration policy for executive directors and non-executive directors

The principal function of the remuneration committee is to determine, on behalfof the board, the remuneration and other benefits of the executive directorsand senior executives, including pensions, share options and service contracts.The company's policy is to ensure that the executive directors are rewardedcompetitively in relation to other companies in order to retain and motivatethem. The emoluments of each executive director comprises basic salary, a bonusat the discretion of the remuneration committee, provision of a car, premiumspaid in respect of individual defined contribution pension arrangements, healthinsurance premium and share options.The remuneration of non-executive directors is determined by the board, andtakes into account additional remuneration for services outside the scope ofthe ordinary duties of non-executive directors. No pension costs are incurredon behalf of non-executive directors and they do not participate in the shareoption schemes.

Service and employment contracts

All executive directors have full time contracts of employment with thecompany. Non-executive directors have contracts of service. No director has acontract of employment or contract of service with the company, its jointventure or associated companies with a fixed term which exceeds six months. Alldirectors' contracts, as amended from time to time, have run from the date ofappointment. Details of the directors standing for re-election are given under'Directors' in the directors' report. The policy of the committee is not togrant employment contracts or contracts of service in excess of six months andthere are no provisions for termination payments. A summary of terms of serviceand employment is as follows: Date Unexpired Notice of contract term period Executive directors M A Heller November 1972 Continuous 6 months A R Heller January 1994 Continuous 3 months T M Kearney November 2003 Continuous 3 months R J Grobler April 2008 Continuous 3 months Non-executive directors C A Joll February 2001 Continuous 3 months J A Sibbald October 1988 Continuous 3 months

The following information has been audited:

Directors' remuneration

Salaries Bonus Benefits Total Pension Total Total and Fees before contibutions 2008 2007 pensions £'000 £'000 £'000 £'000 £'000 £'000 £'000 Executive directors M A Heller 75 100 - 175 - 175 75 A R Heller 300 600 36 936 25 961 716 T M Kearney 185 125 18 328 18 346 476 R Grobler 117 73 10 200 3 203 - 677 898 64 1,639 46 1,685 1,267 Non-executive directors C A Joll 20 - - 20 - 20 20 J A Sibbald 2 - 3 5 - 5 4 22 - 3 25 - 25 24 Total 699 898 67 1,664 46 1,710 1,391

Pension schemes and incentives

Three (2007:two) directors have benefits under money purchase pension schemes.Contributions in 2008 were £46,000 (2007:£56,000), see table above. Directorsare not entitled to benefits under any bonus or incentive schemes apart fromthe share option schemes details of which are set out below. Bonuses areawarded by the remuneration committee when merited.

Performance bonuses were awarded by the remuneration committee to four executive directors during 2008 (2007:2).

Share option schemes

The company has three "Unapproved" Share Option Schemes which are not subjectto HM Revenue and Customs (HMRC) approval. The "First Scheme" was approved byshareholders on 15 June 1999. The "Second Scheme" was approved by shareholderson 23 June 2005, options having been provisionally granted under it on 23September 2004, and the "2006 Scheme" was approved by shareholders on 29 June2006. All available options under the three schemes have been granted. Number of share options Option 1 Granted 31 Exercisable Exercisable price* January in December 2008 from to 2008 2008 First Scheme A R Heller 34p 233,000 - 233,000 30/9/2005 29/9/2012 Employee 34p 80,000 - 80,000 30/9/2005 29/9/2012 Second Scheme A R Heller 149p 80,000 - 80,000 23/9/2007 22/9/2014 T M Kearney 149p 120,000 - 120,000 23/9/2007 22/9/2014 The 2006 Scheme A R Heller 237.5p 275,000 - 275,000 4/10/2009 3/10/2016 T M Kearney 237.5p 275,000 - 275,000 4/10/2009 3/10/2016 Employee 237.5p 50,000 - 50,000 4/10/2009 3/10/2016

*Middle market price at date of grant

The exercise of options under the Unapproved Share Option Schemes is subject tothe satisfaction of objective performance conditions specified by theremuneration committee, which will conform to institutional shareholderguidelines and best practice provisions in force from time to time. Theremuneration committee has not yet set these guidelines for the first schemeand the 2006 scheme. The performance conditions for the second scheme, agreedby members on 23 June 2005, requires growth in net assets over a three yearperiod to exceed the growth of the retail prices index by a scale ofpercentages.

The middle market price of Bisichi Mining PLC ordinary shares at 31 December 2008 was 140p (2006-265p).

During the year the share price ranged between 455p and 135p.

The following information is unaudited:

The board's policy is to grant options to executive directors, managers and staff at appropriate times to provide them with

an interest in the longer term development of the group.

C A Joll

Chairman - remuneration committee

30-35 Pall MallLondon SW1Y 5LP17 April 2009AUDIT COMMITTEE REPORTThe committee's terms of reference have been approved by the board and followpublished guidelines, which are available from the company secretary. The auditcommittee comprises the two non-executive directors, Christopher Joll(chairman), an experienced financial PR executive and John Sibbald, a retiredchartered accountant.

The Audit Committee's prime tasks are to :

Review the scope of external audit, to receive regular reports from PKF (UK)LLP and to review the half-yearly and annual accounts before they are presentedto the board, focusing in particular on accounting policies and areas ofmanagement judgment and estimation;

Monitor the controls which are in force to ensure the integrity of the information reported to the shareholders;

Act as a forum for discussion of internal control issues and contribute to theboard's review of the effectiveness of the group's internal control and riskmanagement systems and processes;

Consider each year the need for an internal audit function;

Advise the board on the appointment of external auditors and rotation of theaudit partner every five years, and on their remuneration for both audit andnon-audit work, and discuss the nature and scope of their audit work;

Undertake a formal assessment of the auditors' independence each year which includes:

• a review of non-audit services provided to the group and related fees;• discussion with the auditors of a written report detailing all relationshipswith the company and any other parties that could affect independence or theperception of independence;• a review of the auditors' own procedures for ensuring the independence of theaudit firm and partners and staff involved in the audit, including the regularrotation of the audit partner; and

• obtaining written confirmation from the auditors that, in their professional judgement, they are independent.

Meetings

The committee meets prior to the annual audit with the external auditors todiscuss the audit plan and again prior to the publication of the annualresults. These meetings are attended by the external audit partner, managingdirector, director of finance and company secretary. Prior to bi-monthly boardmeetings the members of the committee meet on an informal basis to discuss anyrelevant matters which may have arisen. Additional formal meetings are held asnecessary.

During the past year the committee:

Met with the external auditors, and discussed their report to the Audit Committee;

Approved the publication of annual and half-year financial results;

Considered and approved the annual review of internal controls;

Decided that due to the size and nature of operations there was not a current need for an internal audit function;

Agreed the independence of the auditors and approved their fees for both audit and non-audit services as set out in note 5 to the financial statements.

External Auditors

PKF (UK) LLP held office throughout the year. In the United Kingdom the companyis provided with extensive administration and accounting services by London &Associated Properties PLC which has its own audit committee and employs aseparate firm of external auditors, Baker Tilly UK Audit LLP. In South AfricaPKF (Jhb) Inc. is the external auditor to the South African companies, and thework of that firm is reviewed by PKF (UK) LLP.C A JollChairman - audit committee30-35 Pall MallLondon SW1Y 5LP17 April 2009

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the annual report and the financialstatements in accordance with applicable law and regulations. They are alsoresponsible for ensuring that the annual report includes information requiredby the Listing Rules of the Financial Services Authority.Company law requires the directors to prepare financial statements for eachfinancial year. Under that law the directors are required to prepare the groupfinancial statements in accordance with International Financial ReportingStandards as adopted by the European Union and have elected to prepare theparent company financial statements in accordance with United Kingdom GenerallyAccepted Accounting Practice (United Kingdom Accounting Standards andapplicable law). The financial statements are required to give a true and fairview of the state of affairs of the company and the group and of the profit orloss of the group for that period. In preparing these financial statements thedirectors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state in the parent company financial statements whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the parent company financial statements;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business.

The directors are responsible for keeping proper accounting records thatdisclose with reasonable accuracy at any time the financial position of thecompany and the group and enable them to ensure that the financial statementscomply with the Companies Act 1985. They are also responsible for safeguardingthe assets of the group and hence for taking reasonable steps for theprevention and detection of fraud and other irregularities.The directors are responsible for the maintenance and integrity of thecorporate and financial information included on the company's website.Legislation in the United Kingdom governing the preparation and disseminationof the financial statements and other information included in annual reportsmay differ from legislation in other jurisdictions.

The directors confirm, to the best of their knowledge:

(a) that the financial statements, which have been prepared in accordance withIFRSs as adopted by the EU, give a true and fair view of the assets,liabilities, financial position and profit or loss of the company and of thegroup taken as a whole; and(b) the management report included within the Directors' Report includes a fairreview of the development and performance of the business and the position ofthe company and the group taken as a whole, together with a description of theprincipal risks and uncertainties that they face.

VALUERS' CERTIFICATES

To the directors of Bisichi Mining PLC

In accordance with your instructions we have carried out a valuation of the freehold property interests held as at 31 December 2008 by the company as detailed in our Valuation Report dated 10 February 2009.

Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2008 of the interests owned by the Company was £ 8,673,000 being made up as follows:

£000 Freehold 8,673 8,673 Leeds Atisreal Limited 10 February 2009 Chartered Surveyors

To the directors of Bisichi Mining PLC

In accordance with your instructions we have carried out a valuation of the leasehold property interests held as at 31 December 2008 by the company as detailed in our Valuation Report dated 10 February 2009.

Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2008 of the interests owned by the Company was £ 3,100,000 being made up as follows:

£000 Leasehold 3,100 3,100 Leeds Carter Towler 10 February 2009 Chartered SurveyorsINDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF BISICHI MINING PLC

We have audited the group and parent company financial statements ('the financial statements') of Bisichi Mining PLC for the year ended 31 December 2008 which comprise the consolidated income statement, the consolidated balance sheet, the consolidated statement of changes in shareholders' equity, the consolidated cash flow statement, the company balance sheet and the related notes. These financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the remuneration report that is described as having been audited.

This report is made solely to the company's members, as a body, in accordancewith Section 235 of the Companies Act 1985. Our audit work has been undertakenso that we might state to the company's members those matters we are requiredto state to them in an auditor's report, and for no other purpose. To thefullest extent permitted by law, we do not accept or assume responsibility toanyone other than the company and the company's members as a body, for ouraudit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

The directors' responsibilities for preparing the annual report, theremuneration report and the financial statements in accordance with applicablelaw and for preparing the group financial statements in accordance withInternational Financial Reporting Standards ('IFRSs') as adopted by theEuropean Union and the parent company financial statements in accordance withUnited Kingdom accounting standards ('United Kingdom Generally AcceptedAccounting Practice') are set out in the directors' responsibility statement.Our responsibility is to audit the financial statements and the part of theremuneration report to be audited in accordancewith relevant legal and regulatory requirements and International Standards onAuditing (UK and Ireland).We report to you our opinion as to whether the financial statements give a trueand fair view and whether the financial statements and the part of theremuneration report to be audited have been properly prepared in accordancewith the Companies Act 1985 and whether in addition, the group financialstatements have been properly prepared in accordance with Article 4 of the IASregulation. We also report to you whether, in our opinion, the informationgiven in the Directors' Report is consistent with the financial statements. Theinformation in the Directors' Report includes that specific informationpresented in the Chairman's Statement, Mining Review and Business Review thatis cross referenced from the business review section of the directors' report.

In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed.

We review whether the corporate governance statement reflects the company'scompliance with the nine provisions of the 2006 Combined Code specified for ourreview by the Listing Rules of the Financial Services Authority, and we reportif it does not. We are not required to consider whether the board's statementson internal control cover all risks and controls, or form an opinion on theeffectiveness of the group's corporate governance procedures or its risk andcontrol procedures.

We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements.

This other information comprises only the Directors' Report, the unaudited partof the remuneration report, the Chairman's Statement, the Mining Review, theBusiness Review, the Audit Committee report and the Valuers' certificates. Weconsider the implications for our report if we become aware of any apparentmisstatements or material inconsistencies with the financial statements. Ourresponsibilities do not extend to any other information.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the financial statements and the part of the remuneration reportto be audited. It also includes an assessment of the significant estimates andjudgments made by the directors in the preparation of the financial statements,and of whether the accounting policies are appropriate to the group's andcompany's circumstances, consistently applied and adequately disclosed.We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsand the part of the remuneration report to be audited are free from materialmisstatement, whether caused by fraud or other irregularity or error. Informing our opinion we also evaluated the overall adequacy of the presentationof information in the financial statements and the part of the remuneration

report to be audited.OpinionIn our opinion:

• the group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European

Union, of the state of the group's affairs as at 31 December 2008 and of its profit for the year then ended;

• the group financial statements have been properly prepared in accordance with article 4 of the IAS regulation;

• the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally

Accepted Accounting Practice, of the state of the parent company's affairs as at 31 December 2008;

• the financial statements and the part of the remuneration report to be audited have been properly prepared

in accordance with the Companies Act 1985; and

• the information given in the Directors' Report is consistent with the financial statements.

PKF (UK) LLPRegistered auditorsLondon, UK20 April 2009CONSOLIDATED INCOME STATEMENTfor the year ended 31 December 2008 2008 2007 Notes Realised Unrealised Total Total £'000 £'000 £'000 £'000 Group Revenue 1 25,979 - 25,979 16,693 Operating costs (19,754) - (19,754) (14,710) Operating profit on trading 1 6,225 - 6,225 1,983activities Decrease in value of 3 - (3,075) (3075) (2,588)investment properties Losses on held for trading - (534) (534) 31investments Exceptional items 4 - - - 383 Operating profit/(loss) 1 6,225 (3,609) 2,616 (191) Share of loss in joint 14 - (305) (305) (204)ventures Profit/(loss) before interest 6,225 (3,914) 2,311 (395)and taxation Interest receivable 345 - 345 394 Interest payable 7 (539) - (539) (458) Profit/(loss) before tax 5 6,031 (3,914) 2,117 (459) Taxation 8 (2,394) 583 (1,811) 551 Profit/(loss) for the year 3,637 (3,331) 306 92 Attributable to: 3,633 (3,331) 302 92

Equity holders of the company

Minority interest 27 4 - 4 - Profit/(loss) for the year 3,637 (3,331) 306 92 Earnings per share - basic 10 34.76 p (31.87)p 2.89p 0.88p

Earnings per share - diluted 10 33.99p (31.16)p 2.83p 0.85p

Realised income reflects all the mining and property operations. Unrealised income reflects the fixed asset revaluations and joint ventures, where the income has not actually been received.

CONSOLIDATED BALANCE SHEETat 31 December 2008 2008 2007 Notes £'000 £'000 Assets Non-current assets Value of investment properties 11 11,773 14,725attributable to group Fair value of head lease 234 267 Property 12,007 14,992 Mining reserves, plant and equipment 12 7,554 5,859 Investments in joint ventures 13 3,072 2,520 Other Investments 13 334 471 Total non-current assets 22,967 23,842 Current assets Inventories 16 1,397 126 Trade and other receivables 17 5,524 2,130 Corporation tax recoverable 15 174 Held for trading investments 18 627 770 Interest derivative - 16 Cash and cash equivalents 3,414 3,199 Total current assets 10,977 6,415 Total assets 33,944 30,257 Liabilities Current liabilities Borrowings 20 (6,877) (2,402) Trade and other payables 19 (5,815) (5,606) Current tax liabilities (1,645) (454) Total current liabilities (14,337) (8,462) Non current liabilities Borrowings 20 (541) (3139) Provision for rehabilitation 21 (571) - Finance lease liabilities 31 (234) (267) Deferred tax liabilities 23 (2,625) (3030) Total non current liabilities (3,971) (6,436) Total liabilities (18,308) (14,898) Net assets 15,636 15,359 Equity Share capital 24 1,045 1,045 Translation reserve (1,215) (1,276) Other reserves 25 663 426 Retained earnings 15,153 15,164 Total equity attributable to equity 15,646 15,359shareholders Minority interest 27 (10) - Total equity 15,636 15,359

These financial statements were approved and authorised for issue by the board of directors on 17 April 2009 and signed on its behalf by:

M A Heller A R Heller

Director Director

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY for the year ended 31 December 2008

Share Translation Other Retained Total Minority Total capital reserves reserves earnings interest equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 1,045 (1,237) 189 15,333 15,330 - 15,330January 2007 Revaluation of - - - (2,588) (2,588) - (2,588)investment properties Movement on fair - - - 16 16 - 16value of derivatives Other income - - - 2,664 2,664 - 2,664statement movements Profit for the - - - 92 92 - 92year Exchange - (39) - - (39) - (39)adjustment Total recognised - (39) - 92 53 - 53income and expense for the year Dividend - - - (261) (261) - (261) Equity share - - 237 - 237 - 237options Balance at 1 1,045 (1,276) 426 15,164 15,359 - 15,359January 2008 Revaluation of - - - (3,075) (3,075) - (3,075)investment properties Movement on fair - - - 16 16 - 16value of derivatives Other income - - - 3,361 3,361 4 3,365statement movements Profit for the - - - 302 302 4 306year Exchange - 61 - - 61 - 61adjustment Total recognised - 61 - 302 363 4 367income and expense for the year Dividend - - - (313) (313) - (313) Equity share - - 237 - 237 - 237options Purchase of - - - - - (14) (14)additional shares in subsidiary Balance at 31 1,045 (1,215) 663 15,153 15,646 (10) 15,636December 2008

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2008

Year ended Year ended 31 December 2008 31 December 2007 £'000 £'000

Cash flows from operating activities

Operating profit /(loss) 2,616 (191) Adjustments for: Depreciation 2,072 1,196 Share based payment expense 237 237

Unrealised loss/(gain) on investment held for 534

(31)trading Unrealised loss on investment properties 3,075

2,588

Cash flow before working capital 8,534 3,799 Change in inventories (1,271) (69)

Change in trade and other receivables (4,134)

(87)

Change in trade and other payables 636 (454) Change in provisions 571 -

Acquisitions of held for trading investments (334)

(89)

Proceeds from held for trading investments 12

50

Cash generated from operations 4,014 3,150 Interest received 345 394 Interest paid (539) (458) Income tax paid (866) (43) Cash flow from operating activities 2,954

3,043

Cash flows from investing activities Acquisition of reserves, plant and equipment (3,941)

(1,775)

Proceeds from sale of investment properties, 58

158reserves, plant and equipment Acquisitions of investments (420) (78) Cash flow from investing activities (4,303)

(1,695)

Cash flows from financing activities

Borrowings drawn 847 163 Borrowings repaid (546) (990) Equity dividends paid (313) (261) Cash flow from financing activities (12)

(1,088)

Net increase in cash and cash equivalents (1,361)

260

Cash and cash equivalents at 1 January 1,244

978 Exchange adjustment 1 6 Cash and cash equivalents at 31 December (116)

1,244

Cash and cash equivalents at 31 December

comprise: Cash and cash equivalents as presented in the 3,414 3,199balance sheet Bank overdrafts (secured) (3,530) (1,955) (116) 1,244GROUP ACCOUNTING POLICIESfor the year ended 31 December 2008

Basis of accounting

The results for the year ended 31 December 2008 have been prepared inaccordance with International Financial Reporting Standards (IFRS) as adoptedby the European Union and with those parts of the Companies Act 1985 applicableto companies reporting under IFRS. The principal accounting policies aredescribed below:

The group financial statements are presented in £ sterling and all values are rounded to the nearest thousand pounds (£'000) except when otherwise stated.

International Accounting Standards (IAS/IFRS)The financial statements are prepared in accordance with InternationalFinancial Reporting Standards and Interpretations in force at the reportingdate. The group has not adopted any standards or interpretations in advance ofthe required implementation dates. It is not expected that adoption ofstandards or interpretations which have been issued by the InternationalAccounting Standards Board but have not been adopted will have a materialimpact on the financial statements.

Of these standards:

* IFRS 8 "Operating Standards" and

* IAS 1 "Presentation of financial statements"

would impact only on the presentation of these financial statements.

- IAS 27 "Consolidated and separate financial statements" and

- IFRS 3 "Business combinations"

would only have an impact on future business combinations.

Key Judgements and Estimates

The directors consider their judgements and estimates surrounding the life ofthe mine and its reserves to have the most significant effect on the amountsrecognised in the financial statements and to be the area where the financialstatements are at most risk of a material adjustment due to estimationuncertainty.

In addition the directors note that other areas, in particular the valuation of the investment properties, are considered to be less judgemental due to the nature of the underlying properties and the use of external valuers.

Basis of consolidation

The group accounts incorporate the accounts of Bisichi Mining Plc and all ofits subsidiary undertakings, together with the group's share of the results ofits joint ventures and associates.

Revenue

Revenue comprises sales of coal and property rental income. Revenue is recognised when delivery of the product or service has been made and when the customer has a legally binding obligation to settle under the terms of the contract and has assumed all significant risks and rewards of ownership.

Revenue is only recognised on individual sales when all of the significantrisks and rewards of ownership have been transferred to a third party. In mostinstances revenue is recognised when the product is delivered to the locationspecified by the customer, which is typically when loaded into transport, wherethe customer pays the transportation costs.

Rental income is recognised in the group income statement on a straight-line basis over the term of the lease.

Investment Properties

Investment properties comprise freehold and long leasehold land and buildings.Investment properties are carried at fair value in accordance with IAS 40`Investment Properties'. Properties are recognised as investment propertieswhen held for long-term rental yields, and after consideration has been givento a number of factors including length of lease, quality of tenant andcovenant, value of lease, management intention for future use of property,planning consents and percentage of property leased. Investment properties arerevalued annually by professional external surveyors and included in thebalance sheet at their fair value. Gains or losses arising from changes in thefair values of assets are recognised in the consolidated income statement inthe period to which they relate. In accordance with IAS 40, investmentproperties are not depreciated. Properties held for use in the business or inthe course of restoration, renovation or held for development or sale, are notrecognised as investment properties and are held at depreciated historicalcost.

The fair value of the head leases is the net present value of the current head rent payable on leasehold properties until the expiry of the lease.

Mining reserves, plant and equipment

The cost of property, plant and equipment comprises its purchase price and anycosts directly attributable to bringing the asset to the location and conditionnecessary for it to be capable of operating in accordance with agreedspecifications. Freehold land is not depreciated. Other property, plant andequipment is stated at historical cost less accumulated depreciation. The lifeof mine remaining is currently estimated at 5 years.

The provision for rehabilitation is carried at fair value and includes a provision for restoration of the opencast operations which commenced in 2008.

Mine reserves and development cost

The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. Depreciation on mine development is not charged until production commences or the assets are put to use. On commencement of full production, depreciation is charged over the life of the mine on a straight-line basis.

Surface mine development

Expenditure incurred prior to the commencement of working surface mine sites,net of any residual value and taking into account the likelihood of the sitebeing mined, is capitalised within property, plant and equipment and charged tothe income statement over the life of the recoverable reserves of the scheme.

Other assets

The cost, less estimated residual value, of other property, plant and equipmentis written off on a straight-line basis over the asset's expected useful life.Residual values and useful lives are reviewed, and adjusted if appropriate, ateach balance sheet date. Changes to the estimated residual values or usefullives are accounted for prospectively. Heavy surface mining and other plant andequipment is depreciated at varying rates depending upon its expected usage.

The depreciation rates generally applied are:

Mining equipment The shorter of its useful life or the life of the mine

Mining reserves Over the expected life of the reserves

Motor vehicles 25-33 per cent per annum

Office equipment 10-33 per cent per annum

Employee Benefits

Share based remuneration

The company operates a share option scheme. The fair value of the share optionscheme is determined at the date of grant. This fair value is then expensed ona straight-line basis over the vesting period, based on an estimate of thenumber of shares that will eventually vest. The fair value of options grantedis calculated using a binomial model. Details of the share options in issue aredisclosed in the Directors Remuneration Report.

Pensions

The group operates a defined contribution pension scheme. The contributions payable to the scheme are expensed in the period to which they relate.

Foreign Currencies

Monetary assets and liabilities are translated at year end exchange rates andthe resulting exchange rate differences are included in the consolidated incomestatement within the results of operating activities if arising from tradingactivities and within finance cost/income if arising from financing.For consolidation purposes, income and expense items are included in theconsolidated income statement at average rates, and assets and liabilities aretranslated at year end exchange rates. Translation differences arising onconsolidation are taken directly to reserves. Where foreign operations aredisposed of, the cumulative exchange differences of that foreign operation arerecognised in the consolidated income statement when the gain or loss ondisposal is recognised.

Transactions in foreign currencies are translated at the exchange rate ruling on transaction date.

Financial InstrumentsBank loans and overdrafts

Bank loans and overdrafts are included as financial liabilities on the group balance sheet at the amounts drawn on the particular facilities. Interest payable on those facilities is expensed as a finance cost in the period to which it relates.

Finance lease liabilities

Finance lease liabilities arise for those investment properties held under aleasehold interest and accounted for as investment property. The liability isinitially calculated as the present value of the minimum lease payments,reducing in subsequent reporting periods by the apportionment of payments tothe lessor.Interest rate derivatives

The group uses derivative financial instruments to manage the interest raterisk associated with the financing of the group's business. No trading in suchfinancial instruments is undertaken. At each reporting date, these interestrate derivatives are recognised at fair value, being the estimated amount thatthe group would receive or pay to terminate the agreement at the balance sheetdate, taking into account current interest rates and the current credit ratingof the counterparties. The gain or loss at each fair value re-measurement isrecognised immediately in the income statement.

Held for trading investments

Financial assets/liabilities held for trading or short-term gain are measuredat fair value and movements in fair value are charged/credited to the incomestatement in the period.Trade receivables

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated recoverable amounts.

Trade payables

Trade payables are not interest bearing and are stated at their nominal value.

Other Financial assets and liabilities

The groups other financial assets and liabilities not disclosed above are fair valued as shown below.

Financial assets:

- Cash and cash equivalents are measured at cash value.

- Other receivables at amount owed

- Other loans receivable at amount owed

Finance liabilities:

- Other payables at amount owing

Joint Ventures

Investments in joint ventures, being those entities over whose activities thegroup has joint control, as established by contractual agreement, are includedat cost together with the group's share of post acquisition reserves, on anequity basis.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes materials, direct labour and overheads relevant to the stage of production. Net realisable value is based on estimated selling price less all further costs to completion and all relevant marketing, selling and distribution costs.

Other Investments

Other investments are recognised at cost less any provision for impairment.

Impairment

Whenever events or changes in circumstance indicate that the carrying amount ofan asset may not be recoverable an asset is reviewed for impairment. An asset'scarrying value is written down to its estimated recoverable amount (being thehigher of the fair value less cost to sell and value in use) if that is lessthan the asset's carrying amount.

Deferred Tax

Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the tax computations, and isaccounted for using the balance sheet liability method. Deferred taxliabilities are generally recognised for all taxable temporary differences anddeferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised. In respect of the deferred tax on the revaluationsurplus, this is calculated on the basis of the chargeable gains that wouldcrystallise on the sale of the investment portfolio as at the reporting date.The calculation takes account of indexation on the historical cost of theproperties and any available capital losses.Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the group income statement, except when it relates toitems charged or credited directly to equity, in which case it is also dealtwith in equity.Dividends

Dividends payable on the ordinary share capital are recognised as a liability in the period in which they are approved.

Cash and Cash Equivalents

Cash comprises cash in hand and on-demand deposits. Cash and cash equivalentscomprises short-term, highly liquid investments that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changesin value and original maturities of three months or less. The cash and cashequivalents shown in the cashflow statement are stated net of bank overdrafts.

Segmental Reporting

A business segment is a component of the group distinguishable by economicactivity (business segment), or by its geographical location (geographicalsegment), which is subject to risks and returns that are different from thoseof other business segments. The Group's only business segments are miningactivities and investment properties. The Group also reports by geographicalsegment. In presenting information on the basis of geographical segments,segment assets and the cost of acquiring them are based on the geographicallocation of the assets. Segment capital expenditure is the total cost incurredduring the period to acquire segment assets and are based on where the assetsare located.NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 2008

1. Segmental reporting

Business analysis (primary segment)

2008 Mining Property Other Total £'000 £'000 £'000 £'000 Segment revenue 24,911 1,032 36 25,979 Operating profit before 5,573 599 53 6,225adjustments Revaluation of investments - (3,075) (534) (3,609) Operating profit and 5,573 (2,476) (481) 2,616segment result Segment assets 15,199 11,408 752 27,359 Un allocated assets - Fixed assets 99 - Cash & cash equivalents 3,414 Total assets 30,872 Segment liabilities (4,461) (3,230) (2) (7,693) Borrowings (889) (3,000) - (3,889) (5,350) (6,230) (2) (11,582) Unallocated liabilities (6,726) Total liabilities (18,308) Net assets 12,564 Investment in joint 3,072ventures non segmental Net assets as per balance 15,636sheet Depreciation 2,027 - 45 2,072 Capital expenditure 3,788 - 153 3,941

Geographic analysis (secondary segment)

United South Other Unallocated Total Kingdom Africa £'000 £'000 £'000 £'000 £'000 Segment revenue 1,068 24,911 - - 25,979 Operating (loss)/profit (2,957) 5,573 - - 2,616and segment result Segment net assets 6,661 9,162 (46) (3,213) 12,564 Capital expenditure 153 3,788 - - 3,941

1. Segmental reporting continued

Business analysis (primary segment)

2007 Mining Property Other Total £'000 £'000 £'000 £'000 Segment revenue 15,594 1,019 80 16,693 Operating profit before 1,702 269 12 1,983adjustments Revaluation of investments - (2,588) 31 (2,557) Exceptional item - 383 - 383 Operating profit and 1,702 (1,936) 43 (191)segment result Segment assets 7,662 15,772 954 24,388 Unallocated assets 150 - fixed assets - cash and cash equivalents 3,199 Total assets 27,737 Segment liabilities (3,737) (3,201) (16) (6,954) Borrowings (185) (3,402) - (3,587) (3,922) (6,603) (16) (10,541) Unallocated liabilities (4,357) Total liabilities (14,898) Net assets 12,839 Investment in joint 2,520ventures - non segmental Net assets as per balance 15,359sheet Depreciation 1,171 - 25 1,196 Capital expenditure 1,643 - 132 1,775

Geographic analysis (secondary segment)

United South Other Unallocated Total Kingdom Africa £'000 £'000 £'000 £'000 £'000 Segment revenue 1,099 15,594 - - 16,693 Operating (loss)/profit (1,921) 1,702 - - (219)and segment result Segment net assets 9,050 4,773 24 (1,008) 12,839 Capital expenditure 132 1,643 - - 1,7752. Operating costs 2008 2007 £'000 £'000 Mining 12,457 9,997 Property 70 62 Share dealing 7 33 Cost of sales 12,534 10,092 Administration 7,220 4,618 Operating costs 19,754 14,710

The direct property costs are:

Ground rent 15 18 Direct property expense 50 49 Bad debts 5 (5) 70 62

3. Loss/(gain) on revaluation and sale of investment properties

The reconciliation of the investment surplus to the gain on revaluation of investment properties in the income statement is set out below:

2008 2007 £'000 £'000 Gains on revaluation of investment properties - - 383realised Loss on revaluation of investment properties - (3,075) (2,588)unrealised Valuation movement in respect of head lease payments 33 (121) Investment surplus (3,042) (2,326)4. Exceptional items 2008 2007 £'000 £'000 Gain on sale of investment properties -

383

5. Profit before taxation

Profit before taxation is arrived at after charging:

2008 2007 £'000 £'000 Staff costs (see note 29) 7,616 6,228 Depreciation 2,072 1,196 Exchange loss/(gain) 144 (49)

Fees payable to the company's auditor for 43

21

the audit of the company's annual accounts Fees payable to the company's auditor and its associates for other services: The audit of the company's subsidiaries, 19

13pursuant to legislation Tax services - 1 Other services 1 4

The directors consider the auditors were best placed to provide the above non-audit services. The audit committee reviews the nature and extent of non-audit services to ensure that independence is maintained.

6. Director's emoluments

Director's emoluments are shown in the Director's remuneration report on page26 under the heading Director's remuneration which is within the audited partof this report.7. Interest payable 2008 2007 £'000 £'000

On bank overdrafts and bank loans 176

160 Other interest payable 347 262 Hedging 16 36 Interest payable 539 4588. Taxation 2008 2007 £'000 £'000

(a) Based on the results for the year: Corporation tax at 28.5% (2007: 30%) 2,075

326

Adjustment in respect of prior years - UK 142

4 Current tax 2,217 330 Deferred tax (406) (881) Total tax in income statement 1,811

(551)

(b) Factors affecting tax charge for the

year:

The corporation tax assessed for the year is different from that at the standard rate of corporation tax in the United Kingdom of

28.5% (2007: 30%)

The differences are explained below: Profit on ordinary activities before taxation 2,117

(459)

Tax on profit on ordinary activities at 28.5% 603 (138)(2007: 30%) Effects of:

Expenses not deductible for tax purposes 298

89

Capital allowances for the year in excess of - (209)depreciation Capital gains in excess of profit on disposal 283 (307) Other differences 63 43

Deferred tax assets not recognised 328

13

Adjustment to smaller companies rates (31)

(42)

Adjustment in respect of prior years 267

- Total tax 1,811 (551)

(c) Analysis of United Kingdom and Overseas tax

United Kingdom tax included in above:

Corporation tax -

(133)

Adjustment in respect of prior years 142

- Current tax 142 (133) Deferred tax (1,150) (1,023) (1,008) (1,156)

Overseas tax included in above:

Corporation tax 2,075

459

Adjustment in respect of prior years -

4 Current tax 2,075 463 Deferred tax 744 142 2,819 605

Factors that may affect future tax charges:

Based on current capital expenditure plans, the group expects to continue to be able to claim capital allowances in excess of depreciation in future years.

9. Dividends paid 2008 2008 2007 2007 Per share £'000 Per share £'000 Prior period final dividend 3.50 p 366 3.00p 313A final dividend in respect of 2008 of 3.50p (2007: 3.00p) per share amountingto a total of £366,000 (2007: £313,000) is proposed by the board. The dividendproposed is not accounted for until it has been approved at the Annual GeneralMeeting. The amount will be accounted for as an appropriation of retainedearnings in the year ending 31 December 2009.

10. Earnings and diluted earnings per share

Both the basic and diluted earnings per share calculations are based on aprofit after tax of £302,000 (2007: profit £92,000). The basic earnings pershare have been calculated on 10,451,506 (2007: 10,451,506) ordinary sharesbeing in issue during the period. The diluted earnings per share have beencalculated on the number of shares in issue of 10,451,506 (2007: 10,451,506)plus the dilutive potential ordinary shares arising from share options of236,986 (2007: 433,438) totalling 10,688,492 (2007: 10,884,944).11. Investment properties Freehold Long £'000 Leasehold Total £'000 £'000 Valuation at 1 January 11,075 3,650 14,7252008 Additions 123 - 123 Revaluation (2,525) (550) (3,075) Valuation at 31 December 8,673 3,100 11,7732008 Valuation at 1 January 13,470 3,800 17,2702007 Additions 43 - 43 Revaluation (2,438) (150) (2,588) Valuation at 31 December 11,075 3,650 14,7252007 Historical cost At 31 December 2008 4,776 728 5,504 At 31 December 2007 4,653 728 5,381

Long leasehold properties are those for which the unexpired term at the balance sheet date is not less than 50 years.

All investment properties are held for use in operating leases and all properties generated rental income during the period.

Freehold and Long Leasehold properties were externally professionally valued at 31 December 2008 on an open market basis by:

£'000 Atisreal Ltd, Chartered 8,673Surveyors Carter Towler LLP, 3,100Chartered Surveyors 11,773

The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by

The Royal Institution of Chartered Surveyors.

12. Mining reserves, plant and equipment

Mining Mining Motor Office Total Reserves Equipment Vehicles Equipment £'000 £'000 £'000 £'000 £'000 Cost at 1 January 2008 1,703 7,577 579 80 9,939 Exchange adjustment 2 9 - - 11 Additions - 3,774 21 23 3,818 Disposals - - (254) - (254) Cost at 31 December 2008 1,705 11,360 346 103 13,514 Accumulated depreciation 869 2,812 359 40 4,080at 1 January 2008 Exchange adjustment 1 3 - - 4 Charge for the year 281 1708 69 14 2,072 Disposals in year - - (196) - (196) Accumulated depreciation 1,151 4,523 232 54 5,960at 31 December 2008 Net book value at 31 554 6,837 114 49 7,554December 2008 Cost at 1 January 2007 1,976 6,906 562 59 9,503 Exchange adjustment 27 84 6 - 117 Additions 45 1,556 99 32 1,732 Disposals (345) (969) (88) (11) (1,413) Cost at 31 December 2007 1,703 7,577 579 80 9,939 Accumulated depreciation 1,127 2,569 350 42 4,088at 1 January 2007 Exchange adjustment 15 32 4 - 51 Charge for the year 192 946 49 9 1,196 Disposals in year (465) (735) (44) (11) (1,255) Accumulated depreciation 869 2,812 359 40 4,080at 31 December 2007 Net book value at 31 834 4,765 220 40 5,859December 2007

13. Investments held as non-current assets

2008 2008 2007 2007 Joint Joint Other Other Ventures Ventures Assets Assets £'000 £'000 £'000 £'000 At 1 January 1,921 684 2,126 604 Additions - - - 78 Transfer 747 (67) - Exchange adjustment - - - 2 Share of loss in joint (305) - (205) -ventures Net assets at 31 December 2,363 617 1,921 684At 1 January 599 - 511 - Loan to joint venture 110 - 88 - At 31 December 709 - 599 - At 31 December 3,072 617 2,520 684 Provision for diminution in value At 1 January - (213) - (213) Write down of investment - (70) - - At 31 December - (283) - (213)Net book value at 31 3,072 334 2,520 471December Included in other 2008 2008investments are: £'000 £'000 Net book value of unquoted 133 258investments Rehabilitation fund 186 196 Market value of the 15 17overseas listed investments 334 471 Net book value of 35 143investments listed on overseas Stock Exchanges 14. Joint venturesThe company owns 50% of the issued share capital of Dragon Retail PropertiesLimited, an unlisted property investment company. The remaining 50% is held byLondon & Associated Properties PLC.Dragon Retail Properties Limited is incorporated in England and Wales. It hasissued share capital of 500,000 (2007: 500,000) ordinary shares of £1 each. Thecompany owns 49% of the issued share capital of Ezimbokodweni Mining (pty)Limited, an unlisted prospective coal production company. The company isincorporated in South Africa. It has issued share capital of 100 (2007: 100)ordinary shares of ZAR1each. Ezimbokodweni Dragon 49% 50% 2008 2007 £'000 £'000 £'000 £'000 Turnover 101 101 92 Profit and loss Loss before tax - (304) (304) (210) Taxation - (1) (1) 6 Loss after taxation - (305) (305) (204) Balance sheet Non-current assets 708 1,387 2,095 2,261 Current assets - 1,624 1,624 1,649 Current liabilities (708) (1,230) (1,938) (723) Non-current liabilities (101) (101) (1,265) Share of net assets at 31 - 1,680 1,680 1,922December 15. Subsidiary companiesThe company owns the following ordinary share capital of the principalsubsidiaries which are included within the consolidated financial statements: Activity Percentage of Country of share capital incorporation Mineral Products Limited Share dealing 100% England and Wales Black Wattle Colliery Coal mining 100% South Africa(pty) Limited Bisichi Coal Mining (pty) Coal mining 100% South AfricaLimited Bisichi Mining Holding company 100% England and Wales(Exploration) Limited Ninghi Marketing Limited Dormant 90.1% England and Wales16. Inventories 2008 2007 £'000 £'000 Coal Washed 1,284 63 Unwashed - 18 Run of mine 83 38 Other 30 7 1,397 126

17. Trade and other receivables

2008 2007 £'000 £'000 Amounts falling due within one year: Trade receivables 5,392 1,484 Other receivables 76 591 Prepayments and accrued 56 55income 5,524 2,130

18. Held for trading investments

2008 2007 £'000 £'000 Market value of Listed Investments: Listed in Great Britain 582 694

Listed outside Great Britain 45

76 627 770 Original cost of Listed 814 487Investments

Unrealised (deficit) surplus (187)

283

of market value (under) over

cost

19. Trade and other payables

2008 2007 £'000 £'000 Trade payables 852 656 Joint venture 1,551 1,478 Provisions - 472 Other payables 538 762 Accruals and deferred 2,874 2,238income 5,815 5,606

The provision in 2007 relates to the South African litigation which was settled in 2008.

20. Financial liabilities - borrowings

2008 2007 2008 2007 £'000 £'000 £'000 £'000 Bank overdraft 3,530 1,955 - - (secured) Bank loan (secured) 3,347 447 541 3,139 6,877 2,402 541 3,139 2008 2007 £'000 £'000 Within one year 6,877 2,402 From one to two years 334 403 From two to five years 207 2,736 7,418 5,541 Bank overdraft and loan analysis by origin: United Kingdom 6,042 5,159 Southern Africa 1,376 382 7,418 5,541 The United Kingdom bank loans and overdraft are secured by way of a firstcharge over the investment properties in the UK which are included in thefinancial statements at a value of £11,773,000. The South African bank loansare secured by way of a first charge over specific pieces of mining equipmentor the debtors of the relevant company which holds the loan.

Consistently with others in the industry, the group monitors its capital by its gearing levels. This is calculated as the net debt

(loans less cash and cash equivalents) as a percentage of the equity. During2008 this increased to 25.6 % (2007: 15.2%) which was calculated as follows: 2008 2007 £'000 £'000 7,418 5,541 Total debt (3,414) (3,199) Less cash and cash 4,004 2,342equivalents Net debt 15,636 15,359 Total equity 25.6% 15.2% Gearing

21. Provision for rehabilitation

2008 2007 £'000 £'000As at 1 January - - Transfer 99 - Additions 472 - As at 31 December 571 -22. Financial instrumentsTreasury policyThe group enters into derivative transactions such as interest rate swaps andforward exchange contracts in order to help manage the financial risks arisingfrom the group's activities. The main risks arising from the group's financingstructure are interest rate risk, liquidity risk, market risk, credit risk,currency risk & commodity price risk. The policies for managing each of theserisks and the principal effects of these policies on the results are summarisedbelow.Interest rate risk

Interest rate risk is the risk that the value of a financial instrument orcashflows associated with the instrument will fluctuate due to changes inmarket interest rates. Interest rate risk arises from interest bearingfinancial assets and liabilities that the Group uses. Treasury activities takeplace under procedures and policies approved and monitored by the Board tominimise the financial risk faced by the Group. Interest bearing assetscomprise cash and cash equivalents which are considered to be short-term liquidassets and loans to joint ventures. Interest bearing borrowings comprise bankloans, bank overdrafts and variable rate finance lease obligations. The ratesof interest vary based on LIBOR in the UK and PRIME in South Africa.As at 31 December 2008, with other variables unchanged, a 1% increase ordecrease in interest rates, on investments and borrowings whose interest ratesare not fixed, would respectively decrease or increase the profit for the yearby £51,000. The effect on equity of this change would be an equivalent decreaseor increase for the year of £51,000.

Liquidity risk

The group's policy is to minimise refinancing risk. Efficient treasurymanagement and strict credit control minimise the costs and risks associatedwith this policy which ensures that funds are available to meet commitments asthey fall due. Trade and other payables are all due within one year.

The table below shows the currency profiles of cash and cash equivalents:

2008 2007 £'000 £'000Sterling 203 214 South African Rand 3,211 2,985 3,414 3,199

Cash and cash equivalents earn interest at rates based on LIBOR in Sterling and Prime in Rand.

Market risk

The group is exposed to market price risk through interest rate and currency fluctuations and commodity price risk.

Credit risk

The group is exposed to credit risk on its cash and cash equivalents as per thebalance sheet. At the balance sheet date there was no significant concentrationof credit risk. The maximum exposure to credit risk is represented by thecarrying amount of each financial asset in the balance sheet. Trade debtor'scredit ratings are reviewed regularly. The group only deposits surplus cashwith well-established financial institutions of high quality credit standing.As at year end there were no material receivables held past due date.

Financial assets maturity

On 31 December 2008, cash at bank and in hand amounted to £3,414,000 (2007: £3,199,000) which is invested in short term bank deposits maturing within oneyear bearing interest at the bank's variable rates. Cash and cash equivalentsall have a maturity of less than 3 months.

Total financial assets and liabilities

The Group's financial assets and liabilities are as follows, representing both the fair value and the carrying value:

2008 2007 £'000 £'000 Financial assets: 627 770

investments held for trading

Other assets 5,468 2,075 Bank Borrowings (7,418) (5,541) Finance leases (234) (267) Other Liabilities (5,815) (5,606) (3,958) (5,370) Borrowing facilities

At 31 December 2008 the Group was within its bank borrowing facilities and hadnot breached any covenants. Overdrafts are renewable annually. Term loanrepayments are as set out in note 20. The group has undrawn facilities of £3,205,000 (2007: £4,045,000) which expire within one year. Details of otherfinancial liabilities are shown in notes 19 and 20.

Hedge profile

No interest rate swap was entered into during the year. The interest rate swappreviously held at a fixed rate of 4.05% expired in January 2008 and had a fairvalue at 31st December 2007 of £16,000.

Commodity price risk

Commodity price risk is the risk that the Group's future earnings will beadversely impacted by changes in the market of commodities. The group isexposed to commodity price risk as its future revenues will be derived based ona contract with a physical off-take partner at prices that will be determinedby reference to market prices of coal at the delivery date.

From time to time the Group may manage its exposure to commodity price risk by entering into forward sales contracts with the goal of preserving future revenue streams.

Foreign exchange risk

All trading is undertaken in the local currencies. Funding is also in local currencies other than inter-company investments and loans and it is not the Group's policy to obtain forward contracts to mitigate foreign exchange risk on these amounts.

As a result of the group mining assets being held in South Africa and having afunctional currency different than the presentation currency, the Group balancesheet can be affected significantly by movements in the pounds sterling to theSouth African Rand. During 2007 and 2008 the group did not hedge its exposureof foreign investments held in foreign currencies. There is no significantimpact on profit and loss from foreign currency movements associated with theseSouth African subsidiary assets and liabilities as the effective portion offoreign currency gains or losses arising are recorded through the translationreserve.

The effect of a movement in foreign currencies on the income statement and equity of the group is shown in the sensitivity analysis below:

Profit and Profit and Equity Equity loss loss 2008 2007 2008 2007 £'000 £'000 £'000 £'000 If there were a 10% weakening of the South African Rand against Sterling with all other (391) (117) (776) (327)variables held constant - (decrease) If there were a 10% strengthening of the South African Rand against Sterling with all other 433 130 949 401variables held constant - increase 23. Deferred taxation 2008 2007 £'000 £'000 Balance at 1 January 3,030 3,899 Recognised in income (406) (881) Exchange adjustment 1 12 2,625 3,030 The deferred tax balance comprises the following: Revaluation of properties 1,313 1,896 Capital allowances 1,827 1,120 Short-term timing (515) 14differences 2,625 3,030 24. Share capital 2008 2007 £'000 £'000 Authorised: 13,000,000 1,300 1,300ordinary shares of 10p each Allotted and fully paid: 1,045 1,04510,451,506 ordinary shares

The groups objectives when managing capital are:

* To safeguard the group's ability to continue as a going concern, so that it

can provide returns for shareholders and benefits for other stakeholders; and * To provide adequate return to shareholders by ensuring returns are commensurate with the risk.

The group sets the amount of capital in proportion to risk. It ensures that thecapital structure is commensurate to the economic conditions and riskcharacteristics to the underlying assets. In order to maintain or adjust thecapital structure, the group may adjust the capital structure, vary the amountof dividends paid to shareholders, return capital to shareholders, issue newshares or sell assets to reduce debt.25. Other reserves 2008 2007 £'000 £'000Equity share options 577 340 Net premium on share 86 86capital in joint venture 663 426 26. Share based payments

Details of the share option scheme are shown in the Directors remunerationreport on page 26 under the heading Share option schemes which is within theaudited part of this report. Further details of the share option schemes areset out below.

The Bisichi Mining PLC Unapproved Option Schemes:

Year of Subscription Period within Number of Number of Number ofgrant price per which options share share share share exercisable for which options for which options issued options outstanding during outstanding at year at 31 December 31 December 2007 2008 2002 34.0p Sep 2005 - Sep 313,000 - 313,000 2012 2004 149.0p Sep 2007 - Sep 200,000 - 200,000 2014 2006 237.5p Oct 2009 - Oct 600,000 - 600,000 2016 The exercise of options under the Unapproved Share Option Schemes is subject tothe satisfaction of objective performance conditions specified by theremuneration committee, which will conform to institutional shareholderguidelines and best practice provisions in force from time to time. Theremuneration committee has not yet set these guidelines for the first schemeand the 2006 scheme. The performance conditions for the second scheme, agreedby members on 23 June 2005, requires growth in net assets over a three yearperiod to exceed the growth of the retail prices index by a scale ofpercentages.

Options were valued using the Binomial method with the following assumptions:

Expected volatility 45.46 - 47.33%

Expected life 3.00 - 5.00 Years

Risk free rate 4.81 - 4.93%

Expected dividends 0.08%

Expected volatility was determined by reference to the historical volatility ofthe share price over a period commensurate with the option's expected life. Theexpected life used in the model is based on the risk-averse balance likely tobe required by the option holders. 2008 2007 2007 Number 2008 Number Weighted Weighted average average Exercise Exercise price price Outstanding at 1 January 1,113,000 164.4p 1,113,000 164.4p Granted during year - - - - Outstanding at 31 1,113,000 164.4p 1,113,000 164.4pDecember Exercisable at 31 513,000 78.8p 513,000 78.8pDecember 27. Minority interest 2008 2007 £'000 £'000As at 1 January - - Acquisition of subsidiary (14) - Share of profit for the 4 - year As at 31 December (10) - The acquisition of subsidiary relates to an increase in shareholding in NinghiMarketing Limited, an unlisted coal trading company. The company isincorporated in England & Wales. It has issued share capital of 101 (2007:£101)ordinary shares of £1 each. The shareholding in the company is 90.1% (2007:45%)

28. Related Party Transactions

At 31 December 2008 During the year Amounts Amounts Costs Cash paid owed owed recharged (to) to related by related (to) / by / by party party related related party party £000 £000 £000 £000 Related party: London & Associated Properties 147 - 287 (568)PLC (note (a)) Dragon Retail Properties 1,510 - - (73)Limited (note (b)) Ezimbokodweni Mining (pty) - (708) (109) -Limited (note (c)) As at 31 December 2008 1,657 (708) 178 (641) As at 31 December 2007 1,865 (599) 67 (747)

London & Associated Properties PLC is a substantial shareholder.

Dragon Retail Properties Limited is a joint venture and is treated as a non-current asset investment.

Ezimbokodweni Mining (pty) Limited is a joint venture and is treated as a non-current asset investment.

(a) London & Associated Properties PLC Property management, office premises, general management, accounting and administration services are provided for Bisichi Mining PLC and its UK subsidiaries.

(b) Dragon Retail Properties Limited

Dragon Retail Properties Limited is owned equally by the company and London & Associated Properties PLC.

(c) Ezimbokodweni Mining (pty) Limited

Ezimbokodweni Mining is a prospective coal production company based in South Africa.

Details of key management personnel compensation and interest in share optionsare shown in the Directors Remuneration Report on page 26 under the headingsDirectors remuneration, Pension schemes and incentives and Share option schemeswhich is within the audited part of this report.29. Employees 2008 2007 Number Number

The average weekly number of employees of the group during the year were as follows:

Production 453 480 Administration 18 16 471 496 £'000 £'000 Staff costs during the year were as follows: Salaries 6,901 5,654 Social security costs 244 154 Pension costs 234 183 Share based payments 237 237 7,616 6,22830. Capital commitments 2008 2007 £'000 £'000

Commitments for capital expenditure approved but 158

220

not contracted for at the year end Commitments for capital expenditure approved and 390

-contracted for at the year end Share of commitment of capital expenditure in 1,856 1,854joint venture

31. Head lease commitments and future property lease rentals

Present value of head leases on properties

Minimum lease payments Present value of minimum lease payments 2008 2007 2008 2007 £'000 £'000 £'000 £'000 Within one year 15 15 15 15 Second to fifth year 61 59 56 55 After five years 2,054 2,002 163 197 2,130 2,076 234 267 Discounting (1896) (1,809) - -adjustment Present value 234 267 234 267Finance lease liabilities are in respect of leased investment property. Many ofthe lease's provide for contingent rents in addition to the rents above whichis a proportion of rental income. Finance lease liabilities are effectivelysecured as the rights to the leased asset revert to the lessor in event ofdefault.The group leases out its investment properties under operating leases. Thefuture aggregate minimum rentals receivable under non-cancellable operatinglease are as follows: 2008 2007 £'000 £'000 Within one year 658 804 Second to fifth year 2,219 2,541 After five years 9,977 10,424 12,854 13,769 32. Contingent liabilitiesBank guarantee 213 -A bank guarantee for an amount of £213,000 has been provided by Black WattleColliery (pty) Limited to a third party in respect of the construction of dams.COMPANY BALANCE SHEETat 31 December 2008 2008 2007 Notes £'000 £'000 Fixed assets Tangible assets 34 11,872 14,838 Investment in joint ventures 35 847 164 Other investments 35 1,026 1,130 13,745 16,132 Current assets Debtors 36 5,978 1,560 Interest derivative - 16 Bank balances 2,373 2,626 8,351 4,202

Creditors - amounts falling due within one 37 (9,276) (4,635) year

Net current liabilities (925) (433) Total assets less current liabilities 12,820 15,699 Creditors - amounts falling due after one 37 - (3,000)year - medium term bank loan Provisions for liabilities and charges 38 - (39) Net assets 12,820 12,660 Capital and reserves Called up share capital 24 1,045 1,045 Revaluation reserve 39 5,871 8,946 Other reserves 39 578 357 Retained earnings 39 5,326 2,312 Shareholders' funds 12,820 12,660

The company financial statements were approved and authorised for issue by the board of directors on 17 April 2009

and signed on its behalf by:M A Heller A R HellerDirector DirectorCOMPANY ACCOUNTING POLICIESfor the year ended 31 December 2008

The following are the main accounting policies of the company:

Accounting convention

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties, and in accordance with applicable UK accounting standards.

Dividends received

Dividends are credited to the profit and loss account when received.

Depreciation

Provision for depreciation on tangible fixed assets is made in equal annual instalments to write each item off over its useful life. The rates generally used are:

Motor vehicles 25 - 33 per cent

Office equipment 10 - 33 per cent

Foreign currencies

Monetary assets and liabilities expressed in foreign currencies have been translated at the rates of exchange ruling at the balance sheet date. All exchange differences are taken to the profit and loss account.

Investment properties

The investment property portfolio is included in the financial statements atopen market valuation. An external professional valuation is carried outannually by professional external surveyors. Surpluses and deficits arising onvaluations are taken direct to the revaluation reserve. No depreciation oramortisation is provided in respect of freehold and leasehold investmentproperties. The directors consider that this accounting policy, which is not inaccordance with the Companies Act 1985, results in the accounts giving a trueand fair view. Depreciation or amortisation is only one of many factorsreflected in the valuation and the amount which might otherwise have been showncannot be separately identified or quantified.

Investments

Listed investments of the company are stated in the balance sheet as fixed assets at cost less provisions for impairment.

Financial Instruments

Bank loans and overdrafts

Bank loans and overdrafts are included in creditors on the company balance sheet at the amounts drawn on the

particular facilities. Interest payable on those facilities is expensed as a finance cost in the period to which it relates.

Interest rate derivatives

The company uses derivative financial instruments to manage the interest rate risk associated with

the financing of the group's business. No trading in such financial instruments is undertaken.

Debtors

Debtors do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated recoverable amounts.

Creditors

Creditors are not interest bearing and are stated at their nominal value.

Joint Ventures

Investments in joint ventures, being those entities over whose activities the group has joint control as established

by contractual agreement, are included at cost.

Deferred taxation

As required by FRS 19 "Deferred Tax", full provision is made for deferred taxarising from all timing differences between the recognition of gains and lossesin the financial statements and recognition in the tax computation, except forthose timing differences in respect of which the standard specifies thatdeferred tax should not be recognised. Deferred tax assets and liabilities arecalculated at the tax rates expected to be effective at the time the timingdifferences are expected to reverse.

Leased Assets and Obligations

All leases are "Operating Leases" and the annual rentals are charged to theprofit & loss account on a straight line basis over the lease term. Rent freeperiods or other incentives received for entering into a lease are accountedfor over the period of the lease so as to spread the benefit received over

thelease term.Pensions

The company makes contributions to a money purchase scheme and the costs are charged to the profit and loss account

in the period to which they relate.

.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the year ended 31 December 2008

33. Dividends

The aggregate amount of dividends comprises:

2008 2007 £'000 £'000

Final dividends in respect of prior year but not 313 261recognised as liabilities in that year:

The aggregate amount of dividends proposed and not recognised as liabilities as at year end is £366,000(2007: £313,000).

34. Tangible fixed assets Investment properties Long Motor Office Total Freehold leasehold vehicles Equipment £'000 £'000 £'000 £'000 £'000 Cost or valuation at 1 11,075 3,650 148 37 14,910January 2008 Additions 123 - 21 10 154 Disposals - - - - - Revaluation (2,525) (550) - - (3,075) Cost or valuation at 31 8,673 3,100 169 47 11,989December 2008 At valuation 8,673 3,100 - - 11,773 At cost - - 169 47 216 8,673 3,100 169 47 11,989

Accumulated depreciation - - 44 28 72

at 1 January 2008 Charge for the year - - 40 5 45 Disposals in year - - - - -

Accumulated depreciation - - 84 33 117

at 31 December 2008 Net book value at 31 8,673 3,100 85 14 11,872December 2008 Net book value at 31 11,075 3,650 104 9 14,838December 2007

Details of historical cost of investment properties are shown in note 11.

35. Investments Joint Subsidiaries Other Ventures Investments Shares Shares Loans £'000 Total £'000 £'000 £'000 £'000 Cost at 1 January 2008 164 1,024 641 356 2,021 Drawn in year 683 - 22 - 22 Transfer - - - (56) (56) Cost at 31 December 2008 847 1,024 663 300 1,987 Provision for impairment As at 1 January - (678) - (213) (891) Impaired during the year - - (70) (70) As at 31 December 2008 - (678) - (283) (961) Net book value at 31 847 346 663 17 1,026December 2008 Net book value at 31 164 346 641 143 1,130December 2007

Other investments comprise £17,000 (2007: £87,000) shares and £nil (2007: £ 56,000) loans.

Investments in subsidiaries are detailed in note 18. In the opinion of the directors the aggregate value of the investment in subsidiaries is not less than the amount shown in these financial statements.

36. Debtors 2008 2007 £'000 £'000Amounts falling due within one year: Amounts due from subsidiary undertakings 5,869 796 Tax recoverable - 144 Other debtors 73 589 Prepayments and accrued income 36 31 5,978 1,56037. Creditors 2008 2007 £'000 £'000 Amounts falling due within one year: Bank overdraft (secured) 3,042 1,757 Bank loan (secured) 3,000 402 Joint venture 1,551 1,478 Other taxation and social security 69 387 Other creditors 271 278 Accruals and deferred income 1,343 333 9,276 4,635

The bank overdraft of the Company is secured by a charge over freehold and long leasehold property.

Amounts falling due within one year: Bank loans - 3,000

Bank and other loan instalments by reference to the balance sheet date:

Within one year 3,000 402 From one to two years - 400 From two to five years - 2,600 3,000 3,402

The bank loan of the company is secured by a charge over freehold and long leasehold properties.

38. Provisions for liabilities and charges

£'000 Deferred Taxation Balance at 1 January 2008 39 Transfer to profit and loss account (39) Balance at 31 December 2008 -

No provision has been made for the approximate taxation liability at 28%(2007: 28%) of £1,313,000 (2007: £1,896,000) which would arise if the investment properties were sold at the stated valuation.

2008 2007 £'000 £'000The deferred tax balance comprises the following: Accelerated capital allowances - 39 39. Reserves Revaluation Other Retained reserve reserve earnings £'000 £'000 £'000 Balance at 1 January 8,946 357 2,3122008 Dividend paid - - (313) Revaluation of (3,075) - -investment property Movement in reserves - (16) 16 Share options - 237 - Retained profit for the - - 3,311year Balance at 31 December 5,871 578 5,3262008

A profit and loss account for Bisichi Mining PLC has not been presented as permitted by Section 230(4) of the Companies Act 1985. The profit for the financial year, before dividends, was £3,311,000 (2007: loss £289,000).

Details of share capital are set out in note 24 and details of the share options are shown in the Director's Remuneration Report and note 26.

40. Related party transactions

Under Financial Reporting Standard 8 Related Party Disclosures, the Company has taken advantage of the exemption from

disclosing transactions with other Group companies.

Details of other related party transactions are given in note 28 of the Group financial statements.

41. Employees

The average number of employees (excluding directors), in administration, during the year was 2 (2007: 1).

2008 2007 £'000 £'000Staff costs were as follows: Salaries 219 42 Social Security costs 28 5 247 47

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